From Platts:
An industry group representing Chinese iron ore miners aims to satisfy 50% of the country’s annual iron ore consumption with domestic supply by 2025, up from the current 30%, via consolidation and expansion of mining companies, a senior official with the Metallurgical Mines’ Association of China said this week.
…To achieve the 50% target, the association plans to lead a detailed study of domestic iron ore resources and miners and draft guidelines for China’s domestic iron ore industry development over 2016-25.
MMAC announced the project Tuesday at a meeting in Beijing of 200 representatives from related Chinese authorities, major domestic mining companies and steel mills.
The guidelines are expected by the end of this year and will represent the Chinese mining industry’s first detailed road map for future growth, market sources said.
…Angang Mining, a wholly owned subsidiary of Anshan Iron & Steel Group in northeastern China’s Liaoning province, is China’s top iron ore miner with about 60 million mt/year of iron ore mining capacity and more than 8.8 billion mt of iron ore resources in Liaoning.
The association hopes to suggest mergers and acquisitions among domestic mining companies to create six to eight giants with mining capacities of at least 30 million mt/year, said Yang Jiasheng, the senior MMAC official. He said the consolidation would lower production costs and allow the companies to better compete against overseas iron ore suppliers.
China’s iron ore mining industry is dispersed, with at least 4,000 mostly small and privately owned mining companies. Fewer than 10 companies have capacities of at least 10 million mt/year and account for 15% of the country’s total raw iron ore output, according to MMAC.
Ambitious stuff. Lot’s of problem with it, not least the huge fragmentation issue. China is by far the largest iron ore miner in the world but half of its output comes from mines producing 3 million tonnes or less. Rather than some giant threat, I’d file this development under the general heading of “Chinese iron ore durability”. That is, the Chinese iron ore industry is very unlikely to behave rationally as its business gets eaten by Australia and others. It will fight, kick, scream, scratch, bite, pinch and endure longer than most expect.
